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Investors Flee Hedge Funds

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Stockholm (HedgeNordic) – Capital is flowing out of the hedge fund industry for a third consecutive quarter, according to alternative data specialist Preqin. Investors pulled out $45.1 billion from the industry in the fourth quarter of 2018, which brought last year’s total volume of net outflows to $33.9 billion.

The fourth-quarter outflows were mainly attributable to equity-focused and CTA strategies, which registered net outflows of $20.9 billion and $21.3 billion, respectively. For the entire 2018, equity strategies posted the most massive redemptions across all main strategies tracked by Preqin. The net outflows amounted to $23.7 billion and brought the assets under management for the strategy down to $852.8 billion.

Multi-strategy vehicles and funds employing niche strategies were the only two groups of strategies that attracted investor capital in the fourth, posting net inflows of $1.4 billion and $7 billion, correspondingly. According to Preqin data, the hedge fund industry’s assets under management stand at $3.45 trillion as of the end of December, which marks a year-over-year decline of 3.5 percent.

Other sources corroborate Preqin’s findings. Hedge fund data provider Hedge Fund Research (HFR), for instance, writes that investors redeemed an estimated $22.5 billion from hedge funds in the four quarter. The fourth-quarter redemptions brought the hedge fund industry’s full-year capital outflows to $34 billion, leaving the industry with $3.11 trillion in assets under management.

 

Picture © Lightspring—shutterstock

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Eugeniu Guzun
Eugeniu Guzun
Eugeniu Guzun serves as a data analyst responsible for maintaining and gatekeeping the Nordic Hedge Index, and as a journalist covering the Nordic hedge fund industry for HedgeNordic. Eugeniu completed his Master’s degree at the Stockholm School of Economics in 2018. Write to Eugeniu Guzun at eugene@hedgenordic.com

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